NOSSA Seguros. Angolan Insurance Company. 2017, March 28th

Transcription

1 NOSSA Seguros Angolan Insurance Company 2017, March 28th

2 Agenda 1. NOSSA Seguros Corporate Overview 2. Angolan Financial System Overview 3. Angolan Insurance Market 4. NOSSA Seguros Review 5. Insurance Sector Challenges

3 NOSSA SEGUROS CORPORATE OVERVIEW

4 Shareholding Structure Highlights In 2012 BAI assumed control of NOSSA Seguros with the purchase of Real 3,5% MRN Seguros shares. BAI shareholdings reached 72% of NOSSA s share capital. NOSSA Seguros - Nova Sociedade de Seguros de Angola, S.A. was founded in 6 October 2004, resulting of a partnership between the Insurance company Real Seguros, Banco Angolano de Investimentos, International Finance Corporation 5% MATEBA and a group of Angolan small investors. NOSSA Seguros, part of the BAI Group, is 72,2% one of the pioneering companies to start business in the insurance sector in Angola. BANCO ANGOLANO DE INVESTIMENTOS Officially, NOSSA Seguros started its activity in November 2005 and, closely attuned to the multiple needs of the Angolan market, operates in Life and Non-Life 19,3% SMALL SHAREHOLDERS insurance, in the corporate and private segments.

5 Mission and Values Our mission is to contribute to the development of the Angolan insurance market by promoting inclusion, innovation and quality of services, meeting the needs of customers, employees, partners and shareholders. CUSTOMER ORIENTED It is our main purpose and where we focus our attention. We work to meet your expectations and needs For the people and for the commitments we make with them, either being employees, customers, partners or shareholders RESPECT FOR OTHERS VALUING HUMAN CAPITAL Our employees are our most precious resource. Through their effort, we build and consolidate our brand We are guided by clear principles, in all our relations, based on integrity, transparency, accuracy and truth PROFESSIONAL ETHICS We strive to develop a more SOCIAL RESPONSIBILITY fair, cooperative and more socially aware society We support sustainable conditions for the planet, for people and for our business CORPORATE SUSTAINABILITY

6 SHAREHOLDERS Governing Bodies In 2016 ended the mandate of the current administration and NOSSA Seguros in an ordinary General Shareholding Meeting proceeded to the appointment of new governing bodies for the period GENERAL SHAREHOLDERS MEETING BOARD OF DIRECTORS SUPERVISORY BOARD REMUNERATION COMMITTEE Chairman Secretary Chairman Chief Executive Officer 2 Executive Chairman 2 Members 2 Substitute Members Chairman 2 Members AUDITORS EXTERNAL Directors Non Executive Director

7 ANGOLAN FINANCIAL SYSTEM OVERVIEW

8 Financial System in Angola BANKING CAPITAL MARKETS INSURANCE REGULATORS NUMBER OF PLAYERS 27 Banks 45 registered entities 24 insurance companies (3 with Pension Funds under management) 51 brokers 399 agents 6 pension funds managers 26 Pension Funds

9 Financial sector development strategy (1/2) STRATEGIC PILLAR I STRATEGIC PILLAR II STRATEGIC PILLAR III STRATEGIC PILLAR IV FINANCIAL STABILITY FINANCIAL INCLUSION CAPITAL MARKETS INSURANCE & PENSION FUNDS Strengthening of the legal framework and supervision effectiveness to oversee and rule the financial sector, banks resolution, crises management, contingency plans, anti money laundering (AML), countering financing of terrorism (CFT), financial services networks (FSN) and financial services relevant IT systems. Shore up collaterals, strengthen payments systems and promote retail payments, savings campaigns, ensure financing to SMEs, consumer protection and financial education initiatives. To promote the development of capital markets with an initial focus on sovereign debt, subsequently expanding to corporate debt and ultimately the equity market. To diversify the insurance products offering and spread the insurance coverage. To develop the pension funds industry alongside strong regulation and sound governance. IMPLEMENTATION STRATEGY

10 Financial sector development strategy (2/2) STRATEGIC PILLAR IV INSURANCE & PENSION FUNDS To diversify the insurance products offering and spread the insurance coverage. To develop the pension funds industry alongside strong regulation and sound governance. INSURANCE: a) Improve the regulations and supervision of the insurance industry: New insurance regulation consistent with the international standards issued by the International Association of Insurance Supervisors (IAIS). b) Strengthen of the supervision over the insurance industry: Effective prudential and market supervision ensuring compliance with the regulation, based on a well trained and resourceful supervisor. c) Spread the access to insurance products d) Set up ARSEG s Insurance and Pension Funds Academy e) Reinforce Motor insurance and introduce mandatory Personal indemnity insurance f) Develop Agriculture insurance PENSION FUNDS: a) Review and update the legal and regulatory framework for insurance b) The taxation around insurance needs to be reviewed c) Increase awareness of the industry through the establishment of an association

11 ANGOLAN INSURANCE MARKET

12 Context NON-LIFE INSURANCE PENETRATION (GWP IN % OF GDP) AND GDP PER CAPITA (USD) IN 2014 (IN AFRICA) AFRICA 69% 68% 68% 68% 31% 32% 32% 32% ADVANCED MARKETS 58% 56% 57% 56% 42% 44% 43% 44% Source: Swiss Re, sigma explorer (non-life insurance penetration) and IMF, World Economic Outlook April 2016 (GDP per capita) Life Non-Life

13 ASAN Association of Angolan Insurance Companies ASAN NUMBER OF COMPANIES IN ANGOLA AUTO TECHNICAL COMMISSION New minimum capitals and new TPL rate; National registration file; Auto claims and fraud file. FINANCIAL AND FISCAL AFFAIRS TECHNICAL COMMISSION Investment rules; Solvency requirements; New Chart of Accounts; Pension Funds fiscal framework; Savings Insurance Incentives. WORKMEN S COMPENSATION TECHNICAL COMMISSION From a self-regulatory perspective, all the associates subscription and claims management procedures are being reviewed; FUNDAP Creation. HEALTH TECHNICAL COMMISSION Consultation with public entities to improve the efficiency of healthcare provision; Creation of networks of preferred providers. WORKING GROUP ON LEGISLATION REVIEW TRAINING WORKING GROUP MARKETING WORKING GROUP

14 NOSSA SEGUROS REVIEW

15 NOSSA Seguros operational review NOSSA Seguros operates Life and Non-Life insurance and manages open and closed Pension Funds. With a wide structure, expanding throughout the Angolan territory, it has 26 agencies installed in 15 provinces. AUTO ACCIDENTS, HEALTH AND TRAVEL TRANSPORT, PROPERTY AND OTHERS LIFE (RISK) PENSIONS FUND It also relies on the support of the Bank BAI agencies network, under the channel Bancassurance.

16 NOSSA Seguros financial review 2016 Highlights Reinforcement of solvency from 166% in 2015 to 195% in 2016; Growth in 143% of net income; Increased coverage of technical provisions from 150% in 2015 to 186% in 2016; ROE of 31%; Reduction of the Loss Rate; Maintenance of the Expense Ratio.

17 NOSSA Seguros financial review

18 INSURANCE SECTOR CHALLENGES

19 Is there a need to increase the number of mandatory insurance? e.g. Freight transport insurance, multi peril insurance, personal indemnity insurance, etc

20 Reinsurance in Angola When? 1st African Reinsurer: Egypt Re (1957) 1st Privately owned Reinsurer: Best Re (1985) in Tunisia 1st Continental Reinsurer: Africa Re (1976) ANGOLA S CURRENT LEVELS OF RISKS TAKEN MEANS THAT THERE IS A NEED FOR RISK TRANSFER, RESULTING IN HIGH CEDED RATIOS TO REINSURERS. AS SUCH, INSURERS PROFITABILITY IS VULNERABLE TO SHARP INCREASES IN REINSURANCE RATES. Estimated non-life reinsurance market size Today: 36 Reinsurers based in Africa 15 privately owned 4 regional / sub-regional 5 South African based (Swiss Re Life & Health, Munich Re, Hannover Re, Scor Re and Gen Re). 10 State owned & 2 Private/State owned Sources: Africa Reinsurance Pulse 2016 Where AngoRe should be

21 Do we need AngoRe? REINSURANCE BUSINESS RETENTION IN ANGOLA (%) 0,57 0,56 0,55 0,54 0,53 0,52 0,51 0,5 0,49 0,48 0, Currently the insurance sector in Angola only retains half of the GWP, being the other half ceded to international reinsurers; By increasing the retention of risk: Local wealth increases; The FX pressure easies. Source: ARSEG/PWC 2014

22 Could the whole players in the industry apply for Oil & Gas coinsurance? Unrated insurance companies? Lack of internal controls? True & fair audited financials? More stringent solvency requirements to operate the oil & gas insurance business? Lack of underwriting expertise? Lack of actuaries to fairly price the oil & gas insurance risk?

23 Can bancassurance be a solution for growth? The banking sector in Angola is now relatively developed, and insurers are somehow leveraging this through bancassurance and other cross-marketing options. New commercialisation channels trends (e.g. internet, mobile, etc.). Insurtech is a burgeoning phenomenon that has the potential to help the insurance industry to connect with its customers. This is an evolving landscape. INSURANCE BROKERAGE CURRENTLY REPRESENTS AN EFFECTIVE WAY OF DISTRIBUTING INSURANCE PRODUCTS. NEVERTHELESS, ONLINE IS GROWING! INVESTMENT IN INSURTECH AND FINTECH ($ BILLION)

24 Source: BMI Research - Angola Autos Report Q January 2017 Motor insurance A growing constraint? Angolan vehicle sales will continue to decline in 2017, as the combination of high inflation, foreign exchange constraints and unattractive borrowing costs weight on the demand for passenger cars and commercial vehicles. Angola is in the High Risk, Low Reward quadrant. PASSENGER VEHICLE SALES IN UNITS MOTOR RISK/REWARD INDEX f 2017f

25 Motor insurance A growing constraint? Given the current economic situation in Angola, motor insurance segment is underperforming. Motor insurance has the second biggest percentage of market share. Available statistics on Claims in Angola still lag from developed countries. MOTOR INSURANCE Indicators Trend As % of non-life insurance 21% 24% 23% n.a. 27,2% 18,6% Motor insurance, in million Kwanza , , ,3 n.a Motor insurance, % Change 17% 9% n.a. -9%(13-15) -19.5% Motor insurance claims, in Kwanza 3 243, , ,2 n.a IS THERE ANY POSSIBILITY OF SETTING UP A LEGAL FRAMEWORK LEVELING THE ANGOLAN MOTOR INSURANCE CLAIMS STATISTICS WITH THE DEVELOPED COUNTRIES?

26 Should we price Motor Insurance using which available statistics? ROAD TRAFFIC IS THE SECOND CAUSE OF DEATH Botswana 29,1 Kenya IN ANGOLA, AFTER MALARIA REPORTED NUMBER OF ROAD TRAFFIC DEATHS South Africa 26,9 Angola Angola 25,1 South Africa Kenya 23,6 Botswana Nigeria ESTIMATED ROAD TRAFFIC DEATH RATE PER 100,000 INHABITANTS 20,5 Nigeria REPORTED ROAD TRAFFIC CAUSALITIES IN ANGOLA THERE IS URGENT NEED TO ACT! FINANCIAL EDUCATION IN SCHOOLS INTER-MINISTERIAL COMMISSION FOR ROAD CASUALTY CAMERAS ON VEHICLES AND ROADS Accidents Deaths Source: Polícia Nacional Direcção Nacional de Viação e Trânsito Source: World Health Organization Global Status Report on Road Safety

27 Regulation Trends THE PATH TO IFRS Half-way IFRS implementation in the short term (similar to "Insurance CONTIF"); Aiming for full IFRS in the medium to long term, carving out the adoption of IFRS 17; Extended deadline for the IFRS 17 adoption. THE PATH TO SOLVENCY II Introduce a regulatory requirement in having a self-assessment report on the internal control system effectiveness; Introduce a regulatory requirement in having an external audit on the internal control system effectiveness; Introduce a regulatory requirement in having the solvency margin audited by an external auditor. OVERHAUL OF IT SYSTEMS & INFRASTRUCTURE WHAT ARSEG S TIMELINE IS GOING TO BE?

28 Skills and Competencies Insurance companies are struggling for talent; Ongoing strong investment in professional training should be maintained. FOCUS AREAS EXAMPLES OF KEY SUBJECTS Strategy Corporate governance Underwriting Regulator All skills Marketing Technical Finance Claims management Actuarial and Risk Compliance Accounting and Tax Internal control Technology IT Infrastructure Insurance s Academy INCREASED CREDIBILITY & CLIENT SATISFACTION INCREASED PROFESSIONALISATION FAIR COMPETITION ENHANCEMENT

29 Insurance sector challenges Better regulation; Improved supervision; Increased policyholders protection.. REGULATOR FINANCIAL STABILITY Strong solvency ratios; Diversified investments through capital markets; Statutory auditors; Appointed actuaries; International rating. INSURANCE SECTOR CHALLENGES PEOPLE Skilled & knowledgeable professionals. CLIENT Financial literacy; Credibility of the insurance industry; Increased satisfaction.

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